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Employment rate in Saudi Arabia grew by 3.2% in 2014. The issue of foreign labor in Saudi Arabia is now one that touches all corners of the globe. Since 30% of Saudi Arabia’s population of 27.3 million are immigrants from other countries. On the other hand, Saudi nationals have witnessed high levels of unemployment for the past decade; the unemployment rate of nationals remained high at 11.7%. Besides, 35% of the population is under 19 years old, and in few years, this segment will enter the labor market.

The expanding of foreign employees & high rate of unemployment

Currently, foreign employees represent around 31% (8.4 million) of the Kingdom’s population. They dominate the private sector workforce by holding about 90% of jobs. On the other hand, nationals who represent 70% (18.7 million) of the population account for the remaining 10% of jobs.

Foreign employees constitute the major chunk of employees in the Kingdom’s private sector. This is leading to higher unemployment rates among Saudi nationals and causing discontent among the locals. The exhibit above shows that the unemployment rate among nationals has been consistently high for several years.

High foreign remittance is another factor that has been brought to light. Every year, foreign employees in the Kingdom send significant sums of money in the form of remittances back to their home countries. In 2010, Saudi Arabia became the world’s second biggest remittance source, sending USD 27.1 billion in expatriate remittances.

Rise in youth population

Saudi Arabia has a young population with over 40% of its people under the age of 20. Population under the age of 20 increased 4.3% during 2006-2009. The increase in the number of Saudis reaching the working age is exerting further pressure on the labor market. Figures from the International Labor Organization indicate that the Kingdom’s youth unemployment level is worse than that of Jordan, Egypt. According to the Central Department of Statistics and Information, unemployment rate in the 20-24 age categories stood at 30.2% in 2009. Unemployment, especially among the youth, is a critical issue which has diverse negative implications that could affect the Kingdom’s socioeconomic stability and burden the government’s welfare system.

Unrest in the region

The wave of civil unrest that swept across the MENA region last year escalated the urgency for improving job opportunities for Saudi nationals in the Kingdom. Unemployment among others was believed to be a key reason for political instability in several countries across the region. The unrest led to the toppling of governments in countries such as Egypt and Libya. Although Saudi Arabia remained largely insulated from these events, the gravity of the situation is well understood. The Saudi Arabian government announced several social and economic packages during the year to address unemployment and income disparity in the Kingdom. In February, a USD 37 billion package, including pay hikes, unemployment benefits and affordable housing, was announced. Job creation emerged as a top priority in the government’s agenda. The King ordered the creation of 66,000 security force posts, and another 66,000 jobs for graduate teachers and health diploma holders.

Today, oil supplies about 40% of the world’s energy and 95% of its transportation energy. As a result, those who own the lion share of the reserves of this precious energy source are at the driver’s seat of the world economy and their influence is steadily growing. Since the 1930s the Middle East has emerged as the world’s most important source of energy and the key to the stability of global economy. It is home to 65% of global oil proven reserves and 45% of its natural gas. According to the US Geological Survey over 50% of the undiscovered reserves of oil and 30% of gas are concentrated in the region primarily in Saudi Arabia, Iran, Iraq, Kuwait, UAE and Libya.

The automotive sector, comprising of the automobile and auto component sub sectors, is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy.

A construction foreman is the lead position on a specific project in the construction industry. The foreman is responsible for a number of different elements of both project management and employee relations for each job. A good foreman is said by many engineers to be the keystone of projects.

The economy is highly dependent on oil. But the increased oil revenues, and the governments strategy to diversify the economy, has made way for other sectors. The non-oil sector is starting to gain importance, and according to official figures the non-oil grew by 3% in real term in 2009, compared to the total real growth of 0.2 %.

In 2008, there were 2.03 million people in employment. By 2016, total employment is expected to be 77,000 lower than in 2008, recovering from a low of 1.7 million in 2010. In 2008, one quarter of employment was in the market services sector (finance, business services, hotels and other), just under one fifth in health and education, 14% in distribution (retail, wholesale and motor) and 13% in construction. By 2016, the sectoral distribution of employment will change somewhat. Traditional manufacturing is expected to lose 2 percentage points of its share and account for 5% of total employment by 2015. Construction is expected to account for 10% of employment in 2015 compared to 13% in 2008; agriculture for 4% compared to 6%. An increase in share is expected to be observed in market services, high tech manufacturing and transport and communications.

The Saudi labor market is segmented in several aspects, be it in wages, work hours or skills with unique challenges facing the employment of Saudis in the private sector. Data released by the Central Department of Statistics and Information showed that the overall unemployment rate in Saudi Arabia was healthy by international standards at 5.7% during the first half of 2015. This reflected the positive general employment stance of the non-oil economy and the private sector in particular. However, the challenge to the Saudi labor market is rooted in the over-reliance on non-Saudis occupying private sector jobs.

After ascertaining the actual manpower requirements of the organization, the personnel management formulates program for the recruitment, selection, training, etc. of the prospective employees. The best policy which is followed by most organizations is to fill up higher vacancies by promotion and lower level positions by recruitment from labor market.

Manpower management is concerned with training of personnel. It means training of people at all the levels of organization. The success of an enterprise mainly depends on the performance of trained personnel. As a labor oriented industry, tourism needs professionally qualified persons. It is the quality of the service that determines the image of destination.

Worker camps and housing facilities should have a written management plan, including management policies or plan on security, living conditions, workers’ rights and representation, relationships with the communities and grievance processes. Part of those policies and plans can take the form of codes of conduct. The quality of the staff managing and maintaining the accommodation facilities will have a decisive impact on the level of standards which are implemented and the well-being of workers. The manager will be responsible for overseeing staff, for ensuring the implementation of the accommodation standards and for the implementation of the management plans.